Matthew
Lesko's Response to Carol Lopucki's* Criticism of His Talk at
the Flint, Michigan Public Library,
April 26, 2005
(*Ms. Lopucki is the State Director of Michigan's
Small Business and Technology Development Centers.
See Referenced
Correspondence
Below)
Item #1: 53% Of Poor People
Who Start A Business Move Out Of Poverty
Ms. Lopucki says: "Our office in Flint has been flooded
today with people who are in poverty, who you built up hope in,
that
they could crawl out of it by starting a business tomorrow."
Lesko
says: There are many programs specifically aimed at helping people
in poverty start a business. These programs are available
because the data show that they work. The Aspen Institute Self-Employment
Learning Project studied 405 people in poverty who started a
business and found that 53% were able to use their business to
get out of
poverty. These businesses also had better survival rates than
the average business traced by the SBA. (see: www.microenterpriseworks.org/about/factsheets/factsheet1.pdf,
page 6)
There are hundreds, probably even
thousands, of programs around the country to help the poor become
self-employed or start
businesses.
I certainly do not know them all. But here are examples that
you can pass along to people who might contact your office:
1)
Unemployed Can Get Free Money To Live On To Start A Business
Or Receive Entrepreneur Training
The U.S Department Labor has a program where people can use
their unemployment money to become an entrepreneur. It is called, "Self
Employment Assistance Program”. See: http://workforcesecurity.doleta.gov/unemploy/self.asp.
2) Money To Start Or Expand A
Business For People Receiving TANF
Program number 93.593, Job Opportunities For Low-Income Individuals,
from the U.S. Dept. of Health And Human Services, offers money
and training for people who are receiving Temporary Assistance
For Needy Families. See:
http://12.46.245.173/pls/portal30/CATALOG.PROGRAM_TEXT_RPT.show.
3) 400 Organizations That Help
Low-Income People Start A Business
Members of the Association for Enterprise Opportunity provide
free and low cost assistance and training, as well as financial
assistance, to underserved populations who want to start businesses
including people with "low incomes and welfare recipients".
See www.microenterpriseworks.org/meworks/AEOSuccess-FINAL.pdf,
page 6. To find help in a specific state go to www.microenterpriseworks.org/nearyou/.
4) Community Action Agencies Offer
Money And Help For Low Income Entrepreneurs
There are over 1,000 Community Action Agencies across America
and 39% of these offices provide help to low-income people
who want to start or expand a business.
Their programs include “Be Your Own Boss” and “Start A Home
Day Care”. See: www.communityactionpartnership.com to locate an office
near you.
5) Save $1 and the Government
Will Give You Up To $8
The program called Individual Development Accounts (IDA) gives
low income individuals who would otherwise not be able to save
money the chance to save faster by the government matching $8
for every
$1 you put into a saving program. The money can be used for housing,
starting a business or education. To find a program near you
go to: www.idanetwork.org/.
6) U.S. Treasury Provides Money
To Low-Income Communities
The Community Development Financial Institutions Fund of the
U.S. Department of the Treasury provides business loans and venture
capital to people in low income neighborhoods who would otherwise
not have access to funding. See www.cdfifund.gov/overview/index.asp to
view local organizations in your area that receive this money.
7)
100 Venture Capitalist Looking To Invest In Poor Areas
The Community Development Venture Capital Alliance is an association
of over 100 venture capitalists who want to advance the livelihoods
of low-income people
and the economies of distressed communities through entrepreneurial activity.
See www.cdvca.org/.
8)
50 Million Not Receiving Benefits
In addition to these 7 sources for help for low income entrepreneurs, Item
#2 above, shows 5 additional programs that 50 million people don't know they
are eligible for.
Item #2: Your Facts About Apple,
FedEx, and Me are Wrong.
Ms. Lopucki says: “By the way: the facts are that the garage
boys from Apple, and the FedEx folks got SBA LOANS, not free
government money, to start
the companies. We at the SBA are proud of that. You cheapen it. You DO realize
that that money was not only not FREE, it was 3-5% ABOVE PRIME because these
startups were high risk at the launch, and only the SBA would even back them,
by GUARANTEEING up to 85% the BANK LOAN, not free money.”
Lesko says: First of all, I did not say that they received free money. I said they
received government money, which includes grants, loans, direct
payments
and other subsidies which I explained in the seminar. But more importantly,
your facts are wrong about what Apple and FedEx received from the Small
Business
Administration.
They received a total of over $5.5 Million in venture capital money, which
is investor equity money and certainly not a loan at 3-5% above prime.
The quotes
below are taken from the SBA web site and clearly show you are mistaken
about Apple and FedEx funding.
“Apple’s success story began in 1976 in Jobs’ parents’ garage. ….By
the end of 1977, an SBA-backed Small Business Investment Company
(SBIC), Continental Illinois Venture, provided $504,000 in
a critical second phase of
financing.
That year, the emerging company had 63 employees in Cupertino, California,
and posted $774,000 in sales with $42,000 in profits”
www.sba.gov/INV/apple.html
“What many people probably
don’t now is that SBA’s Small Business
Investment Company (SBIC) program plays a significant role by supplying
20 percent – or
roughly $5 million – of the financing needed by Federal Express
in its start-up year” www.sba.gov/INV/fedex.html
Item
#3: 50 Million Non-Rich Would Be Healthier If They Knew The Facts
Ms. Lopecki says: “Oh...and Sam Donaldson
getting prostate cancer surgery on free government money. And
President Bush taking government money to buy his
ball team. How unhealthy is it, to throw in the face of the 200
people in the audience struggling to survive, that "rich
people get the money" and
you should too...”
Lesko says: You
may think that it is unhealthy to tell people that the rich are
taking advantage
of
government programs and others should too,
but I
believe it is a lot unhealthier for our country if programs are
passed by law for everyone
who qualifies but the rich are the only ones who are apply.
Listed
below are 5 documented studies that show over 50 million U.S.
taxpayers can contact the government today and receive these
benefits
but are not
applying because they are unaware that they are eligible. This
is unnecessary pain
that can be eliminated in this country if people only knew about
the programs. How
can the pain of 50 million struggling taxpayers be less important
then the bruised egos of a few rich people?
You are also wrong about what I said about President Bush. He
received a government grant to build a stadium, not to buy the
team. His purchase of about $600,000 for an interest in the team
did not come from the government.
Item #4: I Assumed You Would
Know Where SBDCs Get Their Funding
(At the seminar you told me I was wrong in stating that SBDC
funding comes from federal and state sources and made it quite
clear that the SBDC only receives federal money. I wrote to you
apologizing (see email correspondence below) saying I didn’t
realize that 100% of SBDC money came from the federal government
and your response to my apology follows)
Ms. Lopucki says: “But..
You still don't "get it." We
are funded BY the SBA.”
Lesko says: I hope you know that
the SBA IS a U.S. Federal Government Agency. That is why I wrote
to you, taking your word that things
have changed and the SBDC’s are now only funded by the
federal government (or in your words, the SBA). But your information
is incorrect. The 2005 SBA Budget report clearly states that
the SBDC’s receive funding from the SBA “along with
other sources” and the most recent U.S. General Accountability
Office report states that in addition to SBA money, SBDC’s
receive 50% of their funding from state and local sources. My
original statement in the seminar was that SBDC’s receive
funding from federal and state sources. I can’t see yet
where this is wrong. (See sources below)
“Small Business Development Centers (SBDC’s) with
grants from SBA and matching funds, provide management and technical
assistance, with more than 1,100 service locations in all 50
states and territories to start-up and establish businesses seeing
free or low cost assistance. SBDC’s offer counseling, training
and other services tailored to meet the requirements and needs
of the state and community in which the businesses are located” — SBA
Budget And Performance Plan of 2006, page 195 www.sba.gov/cfo/2006_Budget_Request_and_Performance_Plan.pdf
“SBDC…centers
receive program funding from SBA through annual cooperative agreements.
In addition, they receive funding
from
state and local sources.” — Small Business Development
Center Meet Counseling Needs of Most Clients http://archive.gao.gov/t2pbat11/141160.pdf
Item #5: SBA Annual Report Says SBDC’s Provide “Grant
Help”
Ms. Lopucki says: “You told people 2 opposing
things: "the
SBA does not do grants" and then, "go to your Small
Business Development Center, (funded by SBA), to get grant help"
Lesko
says: These are both true statements. The description
of the Small Business Development Centers described in the 2006
SBA Annual Report (see below) states that SBDC’s do provide
free and low cost counseling for people looking for financial
help to start a business. If this is wrong I would be happy to
change my presentation.
Additionally, when I spoke of going to
the SBDC for grant help it was for help in filling out a grant
application. I never said
that SBDC’s are a source of grant money. What is important
about this is that there are companies out their charging $1,000
saying they will help you fill out a grant application, and people
buying this service even though they do not have a grant application
in hand. Remember the woman who stood up saying she got ripped
off by that company and got more information on the library’s
free talk? She was one of those who spent $1,000 at this company.
I tell these people that if you have trouble filling out a grant
application for your business the SBDC can help you and you don’t
have to spend $1,000.
“Small Business Development Centers (SBDCs) with grants from SBA
and matching funds, provide management and technical assistance,
with more than 1,100 service locations in all 50 states and territories
to start-up and establish businesses seeing free or low cost
assistance. SBDC’s offer counseling, training and other
services tailored to meet the requirements and needs of the state
and community in which the businesses are located. This program
assists business in the areas of marketing and business strategy,
financial, technology transfer, government procurement, management,
manufacturing, engineering, sales, merchandising, accounting,
e-commerce, exporting, and other disciplines needed to start
and grow their small business.” — SBA Budget And
Performance Plan of 2006, page 195. www.sba.gov/cfo/2006_Budget_Request_and_Performance_Plan.pdf
Like me, I am sure you are trying to do good work, and as I
mentioned in my original note, I believe that the SBDC’s
are some of the best programs that our government has to offer.
But as
you can tell from my letter, what you have said about my work
does not convince me that I am doing something wrong or that
it is hurting others. The only thing I can admit to is that the
enthusiasm of my presentation may cause people to believe that
getting the help they need may be easy. But as you saw at the
seminar, there were many times in my talk that I described how
difficult it is to get the help you need. You may remember that
I was quite theatrical at making these points too.
What I DO
believe is hurting people, is when a government office tells
people that there is "NO HELP FOR POOR PEOPLE WHO
WANT TO START BUSINESSES." You may not be aware of the
help and the help may not work 100% of the time, but that does
not
mean help is not there. America is built by immigrants and others
who start with nothing and make their fortunes here as entrepreneurs.
Our country has to continue to encourage this activity with all
we have in order for our country to succeed in the new world
economy.
If you cannot handle the people who call your office
as a result of my talk, you are welcome to have them contact
my office at
1-800-UNCLE-SAM and we will direct them to sources like those
mentioned above or to one of our free source web sites like
http://helpyourself.lesko.com/.
I believe that our democracy belongs to everyone and we all
have a right to use it.
— Matthew Lesko Lesko's Email To Ms. Lopucki
***********************************************************
>>>
"matthew lesko" <lesko70@earthlink.net> 04/27/05
5:49 PM >>>
Ms. Lopucki..
Thanks for showing up at the library talk last night. I always
felt that the SBDC's are one of the most valuable services that
this country has to offer, and thanks for letting me know that
100% of your funding comes from the federal government. I always
thought that some came from the state.
I am sending you a box by UPS of our new entrepreneur box. If
you want me to send some to other offices or need any other help,
just let me know
Matthew
Ms. Lopucki's Response To Lesko
***********************************************************
Matthew...
Thank you for responding.
But..You still don't "get
it." We
are funded BY the SBA. You told people 2 opposing things: "the
SBA does not do grants" and then, "go to your Small
Business Development Center, (funded by SBA), to get grant help" Our
office in Flint has been flooded today with people who are in
poverty, who you built up hope in, that they could crawl out
of it by starting a business tomorrow. WHAT in the world are
you thinking? Non profits are harding surviving themselves. WHY
did you tell them to go to non-profits for free money.
I went last evening, along with one of my staff, because I
just HAD to hear for myself what message was being given. The
theatrics
+ the evangilist manner in which you carried people into believing
that they could crawl out of poverty by listening to you was
terribly disappointing. Our national network
would like nothing more, Mr. Lesko, than you to forget that
we exist. The messages
you give people before
they walk into our door brings false hope, and you know it.
The
fact that you've offered to send me boxes of junk tells me
just HOW out of touch you are with reality, sir.
By the way:
the facts are that the garage boys from Apple, and the FedEx
folks got SBA LOANS, not free government money,
to
start the companies. We at the SBA are proud of that. You
cheapen it. You DO realize that that money was not only
not FREE, it
was 3-5% ABOVE PRIME because these startups were high risk
at the launch, and only the SBA would even back them, by
GUARANTEEING up to 85% the BANK
LOAN, not free money.
Oh...and Sam Donaldson
getting prostate cancer surgery on free government money.And
President Bush taking
government
money
to buy his ball team. How unhealthy is it, to throw in
the
face
of the 200 people in the audience struggling to survive,
that "rich
people get the money" and you should too...
I'm going
to close off. Thanks for the opportunity to finish
off what I did not have opportunity to finish
in person.
Carol LopuckiCarol
Lopucki, State Director
MI-Small Business & Technology Development Center
510 W. Fulton Street
Grand Rapids, MI 49504
616-331-7480
616-331-7485 (fax)
www.misbtdc.org
For FACTS…
…about REAL grant programs for starting or expanding
a business, see my new book Free Money For Entrepreneurs at
www.howtogetagrant.com/grentrepreneurs3.
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